Nike World Cup Jersey Price Cut 35% as Fakes Abound in Brazil

Brazil's forward Neymar reacts during the quarter-final World Cup match between Brazil and Colombia at the Castelao Stadium in Fortaleza, Brazil, on July 4, 2014. Photographer: Fabrice Coffrini/AFP via Getty Images

July 8 (Bloomberg) -- Brazil’s Nike Inc. soccer jersey is
selling for 35 percent off in some stores in the host nation
ahead of the World Cup semifinal as many fans are buying fake
versions instead.

Grupo SBF’s Centauro unit, the biggest sports retailer in
Brazil with 150 stores, reduced the price of its main replica
jersey by 35 percent to 149 reais ($67) late last month,
according to staff interviewed in Rio de Janeiro, Sao Paulo and
Belo Horizonte. Brazil plays Germany, which is outfitted by Nike
competitor Adidas AG, today for a place in the July 13 final.

The initial jersey price of 229 reais -- almost one-third
of the monthly minimum wage -- is prohibitive for most of
Brazil’s 200 million people, many of whom are buying from a
“gigantic” black market of national-team apparel, Amir
Somoggi, a sports marketing consultant in Sao Paulo, said. Nike
pays about $60 million to the Brazilian soccer federation for
the sponsorship, according to Somoggi.

“The return for Nike on the shirt is much bigger from a
branding point of view than financially,” Somoggi said, adding
that it allows Nike to associate itself with star players
including forward Neymar. “Most people don’t earn enough to be
able to afford the shirt.”

Nike spokesman Charlie Brooks declined to comment on the
terms of the pact with the federation or give sales figures.
Jose Neto, a spokesman for Sao Paulo-based Grupo SBF, didn’t
immediately return an e-mail seeking comment about why it
reduced the jersey price by 35 percent.

Unbranded Jerseys

On one street in Salvador, northeast Brazil, last month,
Bloomberg News counted 20 stores or market stands that were
selling versions of the yellow jersey that weren’t made by Nike.
Joselia Braz, who was selling 30-real unbranded yellow jerseys
featuring the federation’s badge, said she was selling about 200
to 300 a day.

“People don’t really care they are not the official
shirts, they care about the price more,” Braz, 32, said on a
recent morning.

Nike, which has made Brazil’s jersey since 1996, last year
introduced a “very plain but iconic” version of the jersey for
99 reais that’s only available in Brazil, Brooks said.

“When we see counterfeit products we will always work with
relevant authorities” to try and stop that, Brooks said.

Brazilian police are unlikely to go after counterfeit
Brazil jersey sellers as proactively as other fake products,
according to Joaquim Falcao, a professor and director of FGV
Direito Rio, a law school in Rio de Janeiro.

“Imagine if the police publicly burnt national team
jerseys live on television like they did a few years ago with
pirated CDs and DVDs,” Falcao wrote in a blog last month. “It
would damage the police’s image.”

Challenging Adidas

While there’s “no way” Nike’s pact with the Brazilian
federation makes money in Brazil, it has helped the Beaverton,
Oregon-based company challenge Adidas’s global dominance in the
$17 billion global soccer products market, according to Paul
Swinand, an analyst at Morningstar Inc. in Chicago who tracks
sports apparel brands.

“Without Brazil, Nike wouldn’t be anywhere near as big as
they are in soccer,” Swinand said.

Nike’s Brooks said Brazil’s jersey is “by far our biggest
seller” worldwide because of the romance and history of the
record five-time champion team whose former players include
Pele, Romario and Ronaldo.

“It’s always used to be everybody’s favorite second team
and that will be rekindled with this year’s World Cup,” Brooks
said.

One Tiffany

Swinand said Nike was right to keep the premium price of
jerseys in Brazil even amid counterfeiting. At a temporary World
Cup stand in Brasilia airport two days ago, the jerseys were
being sold at 229 reais.

“There are lots of diamonds out there but that doesn’t
mean Tiffany has lost its value, people still want to buy the
authentic one,” Swinand said. “The more imitations there are
of it, the more valuable is the original one.”